Investing vs. Speculation

Speculation is investing in an asset with the hope that its value will increase. Speculators typically take positions based on their beliefs about what could happen, and they may be right or wrong. They can speculate on stocks, bonds, commodities, currencies, and other assets.

The speculator’s goal is to make a profit while considering all risks involved with their investment.

Example: Speculation could be on the expectation that a company’s stock price or commodity price will rise or fall in the future, whereas investing would purely be on an expectation that a stock or commodity would increase.